The Star 28 Jan 15;
PETALING JAYA: Benalec Holdings Bhd has received the Department of Environment (DOE) approval to commence reclamation work for its Tanjung Piai petroleum hub and industrial park in the Straits of Johor, the company said in a Bursa Malaysia announcement.
This is the second major approval given for land reclamation works off the shores of Johor that separates Malaysia and Singapore in a space of two weeks.
On Jan 14, Country Garden Pacific View, which is a joint venture between China’s Country Garden and a state government entity, got the approval to reclaim 1,368ha of land near the Second Link connecting Johor and Singapore for a development project called Forest City.
The land reclamation works has not gone down well with Singapore that has expressed its concern to Putrajaya.
According to Benalec, its 70%-owned subsidiary Spektrum Kukuh Sdn Bhd and Perbadanan Setiausaha Kerajaan Johor received the approval that came with several conditions.
Among them is that the reclamation works in Phase 1 of the proposed project should include the construction of an oil terminal, the construction of a jetty and a bridge linking the island to the mainland and dredging.
The company said the approval was valid for two years.
Benalec plans to develop an Integrated Petroleum & Petrochemical Hub and Maritime Industrial Park on the reclaimed land to enable the company to earn recurring income.
Phase 1 of the proposed project is targeted to commence next month, the company said.
The company did not state the size of the land approved for reclamation, but based on previous announcements, the Tanjung Piai project encompasses 1,410ha, of which some 404.7ha have been identified for the purpose of constructing and operating a crude oil and petroleum storage facility together with a private jetty.
According to reports, among the directors of Spectrum Kukuh are the Johor crown prince Tunku Ismail Idris Sultan Ibrahim and Daing A Malek Daing A Rahaman, who are said to be partners to Benalec in the Tanjung Piai reclamation project.
Benalec said the approval represents a major milestone for the company and takes it a step closer to realising its business plans and to be in sync with the country’s aim of establishing itself as a storage and trading hub in Asia Pacific.
Benalec’s shares rose six sen at yesterday’s close to 78 sen, with 8.6 million shares changing hands. The stock is now trading at a two-month high..
The project was first proposed in March 2013.
The project will be financed via internally generated funds and bank borrowings, an earlier announcement said.
In a note late last year, following Benalec’s first-quarter financial year 2015 results, CIMB Research’s Sharizan Rosely said that he expected Benalec’s earnings before interest, taxes, depreciation and amortisation margins to trend lower than its forecast 24% for the full year.
At current prices, Benalec is trading at a price-to-earning ratio (PER) of 26 times and a forward PER of 11.64 times with a market capitalisation of RM623mil.
